'We've been building up positions because the market was due for a rebound,' says Haissam Arabi, chief executive and fund manager at Gulfmena Investments.

'We're sticking to markets with strong economic fundamentals like Saudi Arabia, UAE and Qatar and shying away from Egypt because of its political issues.'

Gulf markets slumped to multi-month lows last week when investor confidence regarding the state of the global economy was shaken amid fears of a double-dip recession following an unprecedented Standard & Poor's. US credit rating downgrade.

Abu Dhabi-listed Dana Gas leds gains in the emirate. The energy firm jumped 3.7 percent, rebounding from Thursday's 28-month low-- accounts for more than half of total shares traded.

It said on Wednesday it more than tripled its second quarter net profit and beating analysts forecasts. The overall Abu Dhabi index gained 0.3 percent to 2,597 points.